L.B. Foster Company

Thank you for standing by and welcome to the L.B. Foster's fourth quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 1-1 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Lisa Durante, Investor Relations Manager. Please go ahead.

Thank you, Operator. Good morning, everyone, and welcome to LB Foster's fourth quarter of 2024 earnings call. My name is Lisa Durante, the company's Investor Relations Manager. Our President and CEO, John Castle, and our Chief Financial Officer, Bill Tommen, will be presenting our fourth quarter operating results market outlook, and business developments this morning. We'll start the call with John providing his perspective on the company's fourth quarter and full year 2024 performance. Bill will then review the company's fourth quarter financial results. John will discuss perspectives on market developments and company outlook in his closing comments. We will then open up the session for questions. Today's slide presentation, along with our earnings release and financial disclosures, were posted on our website this morning and can be accessed on our investor relations page at lbboster.com. Our comments this morning will follow the slides in the earnings presentation. Some statements we are making are forward-looking and represent our current view of our markets and business today. These forward-looking statements reflect our opinions only as of the date of this presentation and we undertake no obligation to revise or publicly release the results of any revisions to these statements in light of new information, except as required by securities laws. For more detailed risks, uncertainties, and assumptions relating to our forward-looking statements, please see the disclosures in our earnings release and presentation. We will also discuss non-GAAP financial metrics and encourage you to carefully read our disclosures and reconciliation tables provided within today's earnings release and presentation as you consider these metrics. So with that, let me turn the call over to John.

Thanks, Lisa, and hello, everyone. Thank you for joining us today for our fourth quarter earnings call. I'll begin my remarks on slide five, covering the highlights of the quarter. First of all, let me say we're very pleased with how we finished 2024 with solid profitability and strong cash generation in the second half of 2024. These results are a clear indication our strategic playbook and execution over the last three years are translating to improving economic profit generation. In the fourth quarter, gross margins of 22.3% were up 100 basis points over last year on 5% lower sales, highlighting the improved profitability of the portfolio. Adjusted EBITDA of $7.2 million was up $1.1 million, or 18.7%, with lower SG&A expenses delivering the improvement versus last year. In line with our normal working capital cycle, we also delivered a strong quarter of cash generation, with operating cash totaling $24.3 million, noting that $49 million was generated in the second half of 2024. Cash from Q4 was deployed primarily to reduce our net debt in the quarter by $20.9 million to $44.5 million at quarter end. As a result of the lower debt levels and improving profitability, our gross leverage ratio came in an impressive 1.2 times. This is an improvement from 1.9 times at the start of the quarter and 1.7 times from last year. Highlights from the full year results are on slide six. Reported sales of $530.8 million were down 2.4 percent as a result of divestiture activity, while organic sales were up modestly. In line with our strategy, gross margins expanded 160 basis points to 22.2 percent despite the lower sales. The approved gross margins increased adjusted EBITDA $1.8 million to $33.6 million for the full year. Solid operating cash flow in the quarter allowed us to reduce debt, improve leverage, and make progress on our stock buyback program with 2.7% of outstanding shares repurchased in 2024. We also finalized the Union Pacific settlement funding in 2024, improving cash generation by $8 million per year going forward. All in all, I'm very pleased with our team's accomplishments and the progress we have made executing our strategy in 2024. Our discipline, execution, and our strategic playbook has positioned us well, and we're optimistic about the prospects for continuing growth in 2025 and beyond. Bill will now cover the financial details for the quarter and year, as well as an update on our capital allocation priorities, which includes a new $40 million stock buyback program. I'll come back at the end with some closing remarks on our markets and outlook for 2025. Over to you, Bill.